FXCM Speculative Sentiment Index (SSI)
Latest Release Dated 03/16/06 (10:00 GMT)
· EUR/USD – Ratio Flips, Signals More Gains Ahead for EUR/USD
GBP/USD – Long Ratio Suggests Underperformance Against Euro or EUR/GBP Strength
· USD/CHF – Confirms Further Strength in EUR/USD and Weakness in USD/CHF· USD/JPY – Ratio Negative but Close to Parity
The ratio of longs to shorts in the EUR/USD is -1.36, which is within the extreme +/- 3 range. The ratio has remained net long up until the Wednesday morning before the TIC report, when it flipped from net long to net short. This coincided with a 100-pip rally in the EUR/USD. Interestingly enough, the EUR/USD has actually continued to rally after hitting the 3.04 extreme level mid last week. With the USD/CHF ratio now confirming the EUR/USD, odds are we have established a true bottom here and the EUR/USD is set to rally further in the days ahead. Total positioning increased 5.0% with short positions rising by a whopping 72% and long positions falling by 31%.
The ratio of longs to shorts in the GBP/USD is +1.63, which is within the extreme +/- 3 range. The ratio has remained net long for the entire week, but like the EUR/USD the GBP/USD has gradually recuperated its recent losses after the ratio hit an extreme level of 4.29 on Monday. Unlike the EUR/USD however total positions actually fell 15% over the week with long positions declining by 29% and short positions rising by 25%. The fact that the GBP/USD ratio still remains net long while the EUR/USD ratio flipped to net short signals the possible underperformance of the British pound against the Euro. Meanwhile for the GBP/USD, the level of the ratio still signals that any rally should continue to meet resistance.
The ratio of longs to shorts in USD/CHF is +1.17, which is within the extreme +/- 3 range. The ratio has just flipped from net short to net long this morning after remaining predominately net short throughout the past week. With the USD/CHF ratio now confirming the bottom in the EUR/USD, the SSI is giving a strong bearish dollar signal. Total positions over the past week fell modestly by 3.1 percent, with long positions rising by 17.8 percent and short positions falling by 19.8%.
The ratio of longs to shorts in USD/JPY is -1.03, which is within the extreme +/- 3 range. USD/JPY was the only currency pair that saw a bit of flip-flopping over the past week. The ratio remained predominantly net short, but flipped for 24 hours on Tues afternoon right when USD/JPY saw a brief pop higher. The ratio then flipped back to net short Wed afternoon and has remained there since then. This signals for more gains in USD/JPY, but the fact that the ratio is so close to parity should make traders a bit more careful of taking the signal. Over the past week, total positions fell by 4.7% with short positions falling by 14% and long positions rising by 8%.
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